brand-new european headquarters in the city of london, i am mark artan. welcome to bloomberg markets. .- i am mark barton welcome to bloomberg markets. vonnie: we are going to continue our coverage of the jobs report. brexit news. we start with breaking economic data. julie hyman is here to give us the details. reading foris the consumer confidence, slightly below the 99 that was estimated. we are seeing cooling for a second month. it does remain at a level consistent with a steady economy and a solid job market, which we heard about earlier this morning. it is the expectations measure that appears to be responsible for this decline. it declined 84.6 from 88.9.

the year ahead, inflation expectations gauge rising to 2.8%, the highest since april of 2016. what we have just heard lisa and john talking about -- inflation in this seemingly robust economy, which has not been heating up. consumers do expect it to heat up over the next year. we see stocks once again rising toward record levels after this morning's jobs report came in better than estimated. as you can see once again, the nasdaq is the out performer as we see strength in technology. look at some of the large-cap tech firms. they are helping contribute the most to games today. the likes of microsoft, apple, and alphabet are strengthening. in the of their weight major averages, they contribute quite a bit. also, another look at technology on the bloomberg. we are looking at the infotech index on the bloomberg, and looking at the breads within that. the blue line is the percentage

of the members above their 200 day moving average. they are showing upward momentum here. even though that measure has been going down or sideways, it is still relatively robust here. a high percentage of those members, as we have seen the tech index get a little bit more choppy in recent days. 100% is here, just for perspective. and then the other asset that has been performing very well this week is the u.s. dollar. the dollar having its best weeks since december of 2016. this is the first week we have seen where all five days have ton up come a going back november. excuse me, march of 2016. here is the week for the bloomberg dollar index, up better than 1%. we have had this economic data. the tax plan has progressed through congress. this is one of the places you have seen it probably the most starkly and most notably. mark, what are you seeing in europe? stocks propelled

higher. look at the wn function, highlighting the strength of european equities today. earlier, the stoxx 600 up nearly 1%, the biggest increase since october 26, on track for the biggest weekly gain since september 15. the european benchmark up by 1.3%, on track for the second weekly rise in the three. banks leading the advance, believed by speculation new capital rules will free up more cash than expected to pay the dividends. let's get to brexit. this is the pound index, bloomberg's very own. highest level since 2016, september last year. this is the five chart showing you the wild ride we have been on this week, as expectations have risen. hope 7 -- and have risen again. the pound index is rising, gaming for the first weekly game, the best run in four months, after the u k and e u struck this deal.

the way for trade issues. little change versus the dollar, rising a third of 1%. classices says it is a "buy the rumor, sell the fact." that is the pound index, the highest level since september last year. this is interesting, investor skepticism about further progress in talks on display. you look at this chart. this is looking at derivatives. one month put options on the pound, traded a premium. the premium is even stiffer for contracts that have a longer shelf life, according to bloomberg fx rate strategists. it seems to be aligned in favor of the pound -- the chart signals. for one thing, the currency is above its 21 day moving average. the gauge provided support for sterling since mid-november. that is sterling. third day running, we are

looking at this chart. look at the one week chart for stein off, 87% lower. this is the value that has come ff intein half -- setinho three days. the last bit of disappointing news if you are long the stock, slashing the 'sobal furniture and clothier credit rating, amid accounting irregularities that are preventing steinhoff from its full-year results. a south african regulator starts a probe, adding to a review by the johannesburg stock exchange and an investigation into germany, where shares in stain shares havehoff been hammered this week. we will look at the bonds later with one of our bloomberg very own. vonnie: yes, mark. we have a lot to get through

today. let's get back to u.s. jobs data, november payrolls up by 228,000, better than estimates, though the previous month was revised lower. the on implement rate holding at 4.1%, a near 17-year low. wage growth was below expectations, and the underemployment rate ticked up to 8%. with us from washington dc is set harris, former u.s. acting secretary of labor. i love being made of good data here. people are pointing out wage growth was not fantastic. how do we manage to avoid structural unemployment in the u.s. over the last several years? or do we know that yet? seth: i don't think we know that. what we do know is that wages are not growing at a rate that workers need to see. over the course of the last year, real wages have only risen about 0.5 percent, about a third of the productivity growth we are seeing. workers are not getting their fair share of the growth in the economy. that is a real concern.

as you know, our economy is 70% consumption driven. workers are consumers. if they do not have money in their pockets, we are not going to be able to sustain growth over the long term. time/age,t's take 2607 in the bloomberg chart library. we have an unemployment rate of, you know -- sorry. the on implement rate of 3.3%, forunderemployment rate that particular demographic is around 11% or so. what can be done to get some of these people back into the workforce? very important point that we don't focus on when we look only at the top line numbers. we still have a sizable amount of slack in our economy. have a margin -- about a million and a half marginally attached workers, and more than 4.5 million part-time workers who would like to be working full time. think of those six plus million workers as hovering around the edges of the labor market, waiting to take jobs.

that is part of what is holding wages down. it is not all of it, but it is part of it. we have seen a tick up in the labor force participation rate among prime aged men 54, butarly, 28 through it is still not back to pre-recession levels. with the job growth we have had, you would expect to see that happen. what is that troubling factor? what does it take to get those people back into the labor force? seth: i think the nature of work in our economy has begun to shift. it has shifted over the last decade and a half. we are more focused on moving people outside organizations, temporarytime work, help arrangements, so they are not on the books of the client employer. they are on the books of somebody else, maybe themselves. that drives their wages down and

deprives them of benefits, and it pits them against workers who thestill employees inside organization. the change in the way we are working has an effect on the way wages are set. it is holding down wages significantly. that could help it. it will put more people to work full-time, but it is not going to change it overall. it is a significant change in the way americans are asked to work. mark: what about the republican tax bill, seth? does it bring about a sustainable improvement in the labor market, or not? seth: in a word, no. what we are going to get is a sugar high, like you see with your kids after halloween. they are running around in circles for a while, and then the crash. moderateee some increase in hiring right after the money starts flowing out. the overwhelming majority of the trillion and a half dollars that are going to be given away to

wealthy individuals -- that is going to go into stock buybacks, dividends. it is going to go to further widening wealth inequality in the united states. it is not going to produce significant jobs. most importantly, it is not going to increase the kind of jobs that support middle-class families. wage, middlee skill jobs in areas like manufacturing, construction, infrastructure, the public sector. this gigantic tax cut is not targeted to producing those kinds of jobs, the jobs we need the most. as a consequence, we are not going to see big upward pressure on wages, and we are not going to see those part-time workers getting back to full-time work latest out ofhe the white house is we are going to get an and the structure plan by january. mike that help? seth: i would love to see the kind of infrastructure plan that candidate trump was talking about, a trillion dollars of public investment that will get roads and bridges and highways rebuilt lines and dams

in the united states. but we are not talking about that anymore. the white house is now talking about a $200 billion plan funded by cutting other parts of the federal budget. so we are not going to have a stimulative effect. and frankly, $200 billion is nowhere near enough money. theie: so let's get off political partisan divide for a moment and just ask about the federal reserve and whether it should do something, whether it should put off another rate increase, for example. them i am eager to see wait. i do not think we are seeing signs of accelerating inflation in the united states. we are certainly not seeing wage-pushed inflation in the united states in a way that would cause the fed to be worried. we are right at or below target right now. i am worried that they are going to slow the economy. effectuine stimulative this tax cut has, i think that this will dampen it.

i just don't see the need for the fed to act. really, what they are trying to do is restore their relevance by getting back to a policy normality, rather than trying to deal with an inflation problem in the economy. to sethour thanks harris, former acting u.s. secretary of labor. appreciate your time. let's check in on first word news. here is emma chandra. ministert if prime theresa may has finally gotten her brexit breakthrough. may and the european union agreed on divorce negotiations. they will work out the solution to the thorniest issue, keeping the border between ireland and northern ireland open after the split. the former head of the u.k. independent party, who led the charge for brexit, nigel farage, is not impressed. nigel: it is more like a surrender. we are paying a huge sum of money, allowing a foreign court to have jurisdiction over our country, committing ourselves to regulatory similarity, which means we cannot become competitive.

and we have done all of this in return for nothing. clears the way for talks amongst businesses who are most interested in trade in a post-brexit future. august has put off tough choices on the budget. lawmakers deferred the government shutdown tomorrow by passing a two-week extension in federal funding. a now face a december 22 deadline for deciding what to do about spending on defense and domestic programs. in southern california, wildfires stretch a couple of hundred miles, from san diego to north of los angeles. the biggest fire has burned almost 180 square miles in venture a county, destroying more than 400 buildings. it is only 5% contained. where conditions -- the weather conditions are abnormally dry and breezy, fueling the fire. there is a twist in the mystery over who paid a record-breaking $450 million for a da vinci painting. a report early this week said the buyer was an obscure member of the saudi royal family. according to "the wall street

journal," the real buyer was crown prince mohammad bin salman. he used the other oils to handle the acquisition -- the other thels to handle acquisition. analysts in more than 120 countries. i am emma chandra. this is bloomberg. mark: thank you very much. coming up, gold has been on a downward trend, falling for three straight weeks. can gold get back on track? tongue-tied today. futures in focus next. ♪

vonnie: live from new york, i'm vonnie quinn. mark: and i am mark barton. on bloomberg's new european

headquarters in the city of london, this is bloomberg markets. futures in focus time. let's chat about gold, falling today. a risk-on mood hitting markets. will it continue? joining us is alan that men -- lutman with agora financial. is the drop in gold all down from here? alan: gold lost some shine because of bitcoin. we will talk about that in a second. gold had been trading between 12 1285. it has gone down from 1300. the downside target was 1245. we did reach that. let's see if we can find some stability. it comes back to the dollar. what is the future for the dollar? the rate hike next week is a done deal. a further out, there is only 50/50 chance for march, and another 50/50 chance for september. a gradual rise in rates i do not

thek is going to affect dollar that much. the overall trade in the dollar is still downward. you touched on bitcoin. let's get to it. what is the trade-off right now between gold and bitcoin? alan: i think some of the attention has gone into bitcoin. they have similar attributes. we were just talking here about, is bitcoin a currency or a commodity? is gold a currency or commodity? kind of the same question. a little bit of both. but in the coming weeks, we are going to start trading bitcoin futures. that is going to change the equation dramatically. you it is on an exchange, are going to eliminate the counterparty risk, and most importantly for me is, you are going to eliminate these fractured markets. the coin yesterday, one exchange had a high of 19,000. the other markets were trading at 17,500. if you bring it together, we can

see where the price is. most importantly, i will trade any market i can get in and out of efficiently, control my risk, and i know where it is trading. that will change once we are trading in futures contracts. mark: quick question on the pound. given today's brexit breakthrough, do we see further upside for sterling? alan: i think so. you saw a little bit of sell the fact profit-taking today. it was positive after the news but now drifted lower. let's remember the pound has bounced from 120 to 1.35. a bit of profit taking. let's not forget about the euro currency, trading at 1.20. hasdeath of euro currency been greatly exaggerated. still more downside in the dollar. i think the euro currency still has some upside potential. mark: alan, great to see you. have a great week. the market strategist at agoura financial. vonnie: great stuff.

it is time for the latest bloomberg business flash, a look at some of the biggest business stories in the news right now. efs has agreed to merge with an energy company controlled by a russian billionaire. the combination will become one of europe's largest independent exploration and production companies. of it.ll control 2/3 the ceo of royal bank of scotland appears to be a skeptic when it comes to bitcoin. ross mcewan spoke to bloomberg tv today. ross: anything that goes from one dollar to 20,000, and then back to 16,000 is, i think, nothing behind it. i think it is really dangerous. vonnie: so far this year, bitcoin has risen more than 1500%. and that is your latest bloomberg business flash. still ahead here on bloomberg markets, what's next for brexit negotiations after

today's big breakthrough? we will get insight from the former u.k. chancellor of the .xchequer norman lamont stirling is down by about a half of 1%. ♪

mark: this is "bloomberg markets." i am mark barton from the new european headquarters in the city of london. i ame: from new york, vonnie quinn. time for etf friday, and that means julie hyman. its thirdomberg held annual etf's in-depth conference. it touched on bitcoin and factor in besting. where joined by the senior etf analyst at "bloomberg intelligence." thederated a panel on bitcoin etf, which we have talked about frequently, and one of the participants said something that really stuck out to you. >> they said bitcoin is uncorrelated alpha. this is the holy grail of

investing. the guy who said this was michael sonnenfeld from grayscale. they put out the bitcoin investment trust. a couple things about this. one, he was talking about the fact that it is not just private investors. having pensions and endowments inquire with his fund. this is not even an etf. this is an over-the-counter traded fund that trades at a premium. he added that it trades $400 million a day over the counter. that is absurd. that is how much mcdonald's trades. you get the idea that if you can get this bitcoin into an etf, this thing could traded billion dollars a day. it could be at the top of the most traded equities in a week. convertnd they plan to into an etf when they get approval from the fcc. they had an application in and the fcc asked them to withdraw it. obviously, there are all the risks of putting bitcoin in an etf.

we will leave those for another day. i want to get to some of your other takeaways. one of them has to do with competition within the etf and fund management industry. >> this is from that good, who runs spider. we heard from advisers that they do not want to use schwab or vanguard because they now compete with them. watch this for the next five years. angered and schwab are offering human advice for robo fees. that is a threat to the advisor business, including robo, which are not human advice, largely. advisors are big users of schwab and vanguard. they love their products. but asset managers and advisers are getting set up for inconvenient, uncomfortable competition. as advisers have pushed down the nearon etf's and funds to zero, as it managers are like, how are we going to make money? we will start offering advice. there are kind to intermediate -- intermediate each other, even though they are kind of friendly. watch how this plays out. julie: maybe they will get into each other's business, the asset

manager starting etf's. >> that happens. julie: i want to get a quote on factor or smart data. >> factor timing is the double black diamond of investing. the momentum -- a lot of etf's try to do it. it is difficult. a guy from inside the business is saying it is very difficult. this is a bigger point. factor investing, you have to go in for the long haul. it seems like a quick thrill, but it is long-term investing where you win in fact are investing. julie: back to you. vonnie: julie, thank you. you can check scarlet fu talking all about etf's on bloomberg "etf iq." ♪ retail.

under pressure like never before. and it's connected technology that's moving companies forward fast. e-commerce. real time inventory. virtual changing rooms. that's why retailers rely on comcast business to deliver consistent network speed across multiple locations. every corporate office, warehouse and store near or far covered. leaving every competitor, threat and challenge outmaneuvered. comcast business outmaneuver. vonnie: live from bloomberg world headquarters in new york, i am vonnie quinn. live from bloomberg's new european headquarters in the

city of london, i am mark barton. this is bloomberg markets. emma chandra has more from new york. economy added more jobs than expected last month. payrolls rose by 228,000 in november, and the unemployment rate remains at 1.4%, almost a 17-year low. still, wages increased less than forecast. the u.s.ember of congress is resigning over allegations of inappropriate behavior. republican congressman trent franks of arizona says he will quit at the end of next month. franks said the ethics committees investigating him for discussing surrogate motherhood staff members. in eastern congo, at least 14 u.n. peacekeepers were killed and more than 40 wounded. most of the peacekeepers were from tanzania. the u.s. peacekeeping -- the yuan peacekeeping mission in congo is the largest in the world, trying to keep armed groups from fighting. guide itsl bank will

bond buying program to a gentle halt. ecb policymakers have agreed to cut bond purchases and half, starting next month. economists forecast bond buying will taper to zero in the fourth quarter of next year. day,l news 24 hours a powered by more than 2700 journalists and analysts in more than 120 countries. i am emma chandra. vonnie: emma, thank you. breaking news. president trump tweeting about wells fargo. i quote the president, saying five penalties against wells fargo bank for bad actions against their customers will not be dropped, as is incorrectly being reported, but will be pursued, and if anything, substantially increased. regs, cut rags, -- cut but make penalties severe. this is a tweet from donald

trump's account a few minutes ago. wells shares had been rising in the last few minutes. we are reaching out to wells fargo for a response to this threatening tweet from the president. it is not clear who he is pursuing, but it sounds like it is from his own voice. mark: breaking news from ryanair, the european low-cost carrier. it has extended its global distribution partnership with amadeus, the booking reservation system. the partnership will end on december 15. they are ending their gds partnership. they are unable to reach a packed. global distribution partnership with a monday has has been ended and will end on december 15. vonnie: it is time for our stock of the hour. the worst performer in the stoxx 600. a south african furniture company. shares have lost a stunning 19% of their value this week. $20 billion worth of market cap down to $6 billion.

abigail doolittle is here to tell us why. abigail: this has to be one of the most interesting stock stories i have had the opportunity to report on in a long time, and i could talk about this forever. the picture, we are looking at a number of stock listings. we have the south african listing, the german stock listing, and also a south african ipo. lots of complexity. all of these shares plunging in a huge way this week. the hind this, the possibility of the accounting scandal you mentioned. around it.d take a look at the five-day chart of steinhoff germany. we will see the huge plunge. it is due to a number of reasons. said this week they would not publish results. they would publish results -- excuse me -- that would not be audited. they came out saying they will not publish results, but would do an independent investigation. the third announcement had to do with liquidity concerns, suggesting they probably have $3

billion to $6 billion of cash on hand. this is a highly acquisitive company, acquiring all sorts of -- even beyond furniture store companies. one well-known in the u.s., mattress firm. they have changed accounting periods. lots of other divisional issues. that is one layer to this story. in one statement, they recently said the investigation is into non-south african assets worth about $6 billion, suggesting an interface -- an investigation into european assets. that's of stories around this. it is not known what they are investigating. it could have to do with a dispute with jb assets, with tax rates, with off-balance-sheet assets emma with debt and losses. it is very interesting, because on the one hand you have the stock plunging, down 90% this week. on the other hand, bankers who are funding these companies -- they were supposed to meet around all of this next monday, a delay the meetings until december 19, suggesting they may

not think this is the crisis that investors think it is. that is a pretty interesting tension to think that investors think the company is worth about 44 euro cents. the bankers think they can wait another week or two to find out what is happening. it could present an opportunity for the right investor. based in southff africa but trading in germany. our thanks to abigail doolittle for the stock of the hour. mark, breaking news? a debtreaking news on ridden israeli drugmaker, considering cutting 10,000 jobs. the chief executive speaking. this is according to people familiar with the matter. they are aiming to reduce expenses. a little less than half of the cuts arlington linked to research and development spending. last month, the ceo took the helm. he wants to change this. the stock has plummeted to its

lowest level in 17 years. breaking news from teva crossing the terminal. cutting up to $10,000. back to steinhoff. eric has been looking at this, our team leader for european consumer news. we have looked at the stock angle. how badly have the bonds been faring this week? all around.s bad it has gone bad for bonds as well. mood is today downgraded -- moody downgraded it to junk. the stock is down, as we said, 90%. it is an all around mess. mark: is its fire ability in doubt? are we looking at the end to this? is there going concern? eric: they were supposed to have a meeting on monday with lenders that they have now postponed. they have said they will do it a week later. that kind of delays the questions. in the meantime, you have got to think there is going to be asset sales considered.

they have to raise liquidity and scramble to keep us afloat. mark: on the liquidity front, what have they said? how are things? much atey have not said all. that is the problem, part of the issue around this, the complete lack of transparency. very, very sketchy commentaries from them so far. after fairly extraordinary events, the ceo leaving on tuesday, delayed financial reporting, a financial scandal, and little beyond a few sketchy statements from the company. vonnie: who are the major shareholders and main debt holders? do we know? we do know, obviously. isc: the biggest shareholder a south african entrepreneur and billionaire, although his status as a billionaire is kind of under threat as the stock collapses. he has got 19% of the parent company. and he is an entrepreneur who kind of built this up over decades.

he is in trouble. the bondholders are a whole group of local south african and international banks. you have a pretty broad exposure here to a big mess. mark: and it is political, isn't it? many retirement and savings funds will be linked to steinhoff. the public investment core in south africa has a big stake in steinhoff as well. politically, this is a hot potato right now, isn't it? eric: that is right. the investment corp. in south africa have already said they are looking for answers. there is a growing series of investigations in south africa that have now kind of belatedly, after the original german investigation that started this -- the south africans have gotten in a variety of regulatory agencies down there. this is going to obviously heat up down there. mark: eric, thanks for bringing us up to speed. pfannertor -- eric bringing us the latest. vonnie: bitcoin falling back to $15,000. frenzied moves have traders

thinking twice about the cryptocurrency. we will be looking at that next. ♪

vonnie: in new york, i'm vonnie quinn. mark: live from bloomberg's new european headquarters in the city of london, i am mark orton. this is blown -- i am mark barton. time for a look at some of the biggest business stories in the news right now. shares of the maker of smith and falling to a two-year low today. the american outdoor brand lowered profit targets and said

steep price cuts will continue for the near future. the chief executive says that fear-based motivation for buying guns has been replaced by the search for bargains. moving production of its electric powered suv's from michigan to mexico. that will make the vehicles cheaper to build. the move angers president, who criticized ford for failing to plant inmall car mexico and could eventually kill the project. the chief executive of royal bank of scotland does not see settlements with the u.s. over a mortgage bond investigation happening this month. ross mcewan spoke to bloomberg television. ross: as an optimistic human being, there is still a chance, but a diminishing chance, given the end of the year. as is something we do want to resolve and we have made it clear we want to resolve it. it is the last major -- and i say major thing -- standing between us and being a much more

normal bank and being able to get back into a position of talking to our regulator about paying a dividend, which i think would signify that this bank has gone through a major rehab and is back into a more normal position. mark: he says when rbs does resume paying dividends, the bank will start small. now for the third time, you tube parents alphabet will try to catch up with spotify and apple in the music business. alphabet's youtube will come up with a paid music service in march. that could a pedal -- appease record executives who have been pushing for more revenue from youtube. that is your bloomberg business flash. vonnie: mark, thank you. bitcoin gyrating massively all week. global markets going alive with futures contracts on the cryptocurrency sunday. wall street is getting worried about the whole thing.

let's discuss it. what is the main concern? >> there are a few main concerns, one of them being reputational risk. -- example, what if clients j.p. morgan for example is considering offering the futures, but they will not on day one. goldman will be doing it almost immediately. the bank executives have come off on different sides of this debate. any of them have been very worried about it. for the futures market makes this market more accessible to a lot more investors. what if the banks end up helping their clients into an investment that eventually blows up? reputational risk is one thing, and violent volatility is another, right? there is supposed to be a high margin requirement on these contracts. what happens if clients are not able to post the margins? vonnie: it feels like the more mornings there are out there, the higher the price goes. what is that about? sonali: you have seen a lot of worries in the last week or so, but the prices inched higher and higher. surged 20%, and it

also crashed back down. now, it is around 15,500, right? they're definitely has been volatility. those valuations, and what is underlying the value of the currency, is definitely a question. vonnie: we have to leave it there, but will eagerly await what happens next week with bitcoin. that is sonali basak. mark: what is next in brexit negotiations after today's big breakthrough in brussels? we get insight from the former u.k. chancellor of the executor, norman lamont. ♪

vonnie: in new york, i'm vonnie quinn, and this is "bloomberg markets." bloomberg'sve from new headquarters in the city of london, i am mark barton. ,et's get to the breakthrough prime minister may, negotiations

for the e.u., announcing a deal on divorce negotiations in brussels. >> today's result is, of course, a compromise. it is not a result of a long and intense discussion between the commission negotiators and those of the u.k. pm may: lots of jobs will depend on this. >> this was a difficult negotiation for the european union as well as the united kingdom. >> the challenge is still ahead. >> there is still work to be on a and negotiation number of issues. i am optimistic about the discussions ahead. in the meantime, reaching the agreement now ensures that businesses will be able to make investment decisions based on an implementation period. >> we on the that breaking up is hard. all know that breaking up

is hard. breaking up and building new relations is much harder. mark: despite the breakthrough, lots of challenges lie ahead. joining us from westminster is norman lamont, former u.k. chancellor of the exchequer. lord lamont, thanks for joining us today. is this brussels fudge? norman: i do not think it is brussels fudge, but this is really getting on to the next stage. it does not mean that all problems have been solved. it does not mean that the question of the border with northern ireland has been solved. it means they have agreed on a few principles, and that they can now, because i think sufficient progress has been move to the can now second stage. in the second stage, of course, is when they begin to talk about trade arrangements, which is by far and away obviously the most important part of the negotiation. mark: so prime minister may did not concede too much? norman: i don't think that she

conceded too much, no. i mean, i have only just glanced at the document. it is quite a dense document. it seems to me that what the irish government were looking for was a firmer assurance that if there were no trade agreement, if there were no trade agreement, there would still not be a return to a hard border. and of course if there is a trade agreement, i think the solution to the irish border will be much easier. i dohe important thing -- not mean in any way to diminish the irish border question. but obviously the big subject is the trade negotiations. we are on the road to talking about that. the hard part,is lord lamont, of a negotiations. we triggered article 50 back in march. here we are in december, a little over a year until we leave the e.u., and here we are

in the hardest part of the negotiations. what hope do you have for the -- what sort of trade deal we are looking at? some are saying canada. some are saying canada-plus. what is your best bet scenario? norman: you say this is the hardest part, and many people do say that. i cannot see why it should be so hard, because it is not like negotiating a free trade agreement from scratch, with nothing. we are already fully compliant with e.u. regulations. we have zero tariffs. what we seek to do is replicate a zero tariff solution. that should not take very long. i mean in theory you ought to be able to do it very, very quickly. i think the problematic areas are much more in financial services, where obviously tariffs do not apply. it is a question of guarantees about regulation. i think the u.k. will be looking for a solution based on what is called equivalents. that is to say that u.k.

regulatory authorities and u.k. regulation should be regarded as equally as valid as european regulation. there is no reason why it should not, because the starting point, again, is at the beginning, we are completely identical. it is a question of negotiating instruments for change and emergence when we which -- we wish to divert at a future date. lamont,britain, lord has until october to get this done. if it took 17 months to get this far, to get to the trade portion, what makes you so confident that 10 months will do the rest? norman: i think the difficult issue in a way was the money. i think that is what the european union is above all interested in. but the reason i believe it can be done is the one i have already stated. this is not like starting a trade negotiation from scratch. 040 tariff, ae set of arrangements that were to everybody's advantage, i assume

with some confidence. i assume the e.u. is going to be rational about this. it is manifestly in their interest to have a free trade agreement with the u.k., which after all has a very significant current account deficit with the european union. on theld have thought trade side it is obvious for both sides where their interests lie. vonnie: lord lamont, how confident are you that theresa may gets to hold on to power, and for how long, given that conservatives in the party will not be pleased with what was agreed to in that 15-page document with europe? there are three reasons why. it holds onto the soft status for e.u. citizens in britain. it also makes no concessions in terms of the border, the default state with ireland and that border is going to be the status quo. and there are still payments to be made in 2019 and 2020, all of which will not be pleasing to the conservatives. norman: well, i think you can

judge for yourself. you can watch prime ministers questions. i think the conservative party will be quite content with what has been negotiated. border, talk about the people want to maintain an open border. there is no question. i don't know what you are getting at. the wish of the irish government and the wish of the u.k. government on keeping the border open is exactly the same. when you talk about the payments, yes, we have had to pay something, that we would have been paying 12 billion pounds a year for our membership if we remained in. what we are doing is continuing to pay it for a few more years during a transitional period, and then it stops. the savings will still come when the transitional period ann's. i do think -- i do not think anybody will be worked out about that. a businessu are today, what are you thinking? we spoke to the royal bank of

scotland chief executive. he said this does not hold rbs plans to establish this alternative trading hub inside the e.u. they are still planning for the worse case scenario. they have to. this ties into what you said earlier about financial services as a key element when trade negotiations get underway. what are businesses thinking today? yes, the transition deal now is very possible. but if you are a business, does this provide more certainty? or is there still a great deal of uncertainty, given the worst outcome is still possible during the trade negotiations path of this whole scenario? possible -- byst which you mean no deal -- i am not sure it would be a calamitous outcome. but it is still possible. but i think the arts have moved very firmly in favor of a deal being reached. of course, businesses always have to plan on several

scenarios, including the worst possible outcome from their own point of view. but i think people know several things for clear now. one, we will be outside the customs union and the single market. on they know we are moving to the trade part of the negotiations. and there is a good chance that we will reach an agreement on that. i think it is quite clear that the european union has to reach an agreement. mark: lord lamont, thank you for joining us today. the former u.k. chancellor of the exchequer, board lamont, on the back of the big news, which has not moved sterling, but markets are rising. ♪ .

mark: 11:00 in new york and midnight in hong kong. 30 minutes left in the trading day in europe. i'm our new european headquarters in london, i am mark barton. vonnie: i am vonnie quinn.

this is the european close on bloomberg markets. ♪ mark: here are the top stories from the bloomberg and around the world, brexit break through the u.k. and eu strike a deal on divorce talks, paving the way for critically important trade talks. we look into the next steps. we will discuss the market moves around brexit and the u.s. jobs report and which currency is better positioned for gains in the coming year. we both hear from rbs chief executive ross mcewan and an exclusive interview, what he says about the business impact of brexit on the banking landscape. europeanok at where equities are trading 30 minutes away from the end of the friday session. gmm is the function. the ftse